It is down to last 5 for buying Satyam

It has been 3 long and painful months for Satyam – the company. Lot of things happened in 3 months. So many things have happened that one can even just blog about Satyam only and nothing else. Now, the sad story might have a happy ending. The sale of 51% stake in Satyam Computers has reached the penultimate stage where 1 out of 5 possible bidders will take over the company.

Though names of several groups have come and gone, 3 names remained prominent throughout. L&T which has 12% stake already, Spice Group fresh from the sale of its telecom arm and Tech Mahindra which just lost its Fitch rating. The other 2 names could be anybody. If rumors are to be believed IBM and HP are also interested.

Satyam board and its current CEO has said that the buyer should have interests in IT. That would rule out Spice Group as Tech Mahindra and L&T (L&T Infotech) both have IT interests. But, Spice group was hell-bent on acquiring Satyam and even proposed a e-Auction without even looking at the financial’s. Satyam’s board has to look at 2 things the price being offered and the strategic fit for Satyam in the buyer’s portfolio.

Private equity players are also good bets to hold Satyam in their portfolio. Players like General Atlantic, Blackstone, KKR and Carlyle group are believed to be in the race. iGate has pulled out of the race after taking a peek at the financial’s. It has also rated the stock at 35 rupees a piece.

Tech Mahindra has its own share of problems for acquiring Satyam. It lost its Fitch ratings after bidding for Satyam. British Telecom one of Tech Mahindra’s shareholders has raised concerns about the deal citing the legal obligations and class action suits of Satyam. L&T isn’t better off as markets related mixed to its stock and the news that it is bidding for Satyam.

We have interesting 2 months ahead of us. We got many things to watch out, the elections, IPL and the Satyam sale.

PS: As per CBI the fraud could be as big as 10,000 crores or $2bn. That was supposed to be the networth of the company itself.